On Friday, Truist Securities updated its financial model for agilon health Inc (NYSE:AGL), resulting in a slight increase of the price target to $6.50 from $6.40, while retaining a Hold rating on the stock. The adjustment follows agilon health's recent first-quarter earnings report and its revised outlook for 2024.
The analyst at Truist Securities revised the revenue estimates for agilon health for the fiscal years 2024 and 2025. The new projections are set at $6.17 billion for 2024 and $7.12 billion for 2025, a change from the previous estimates of $6.44 billion and $7.58 billion, respectively. Additionally, the adjusted EBITDA estimates for these years have been updated to negative $36 million and negative $2 million from the earlier forecasted negative $54 million and negative $8 million.
The updated price target of $6.50 reflects a valuation based on approximately 15 times the estimated steady state EBITDA for the year 2030. This valuation is then discounted back to account for the current volatility in operations, particularly concerning the forecasting of medical margins.
The analyst's commentary provided insight into the rationale behind the new price target, indicating that the adjustment was made after considering the company's first-quarter performance and its updated outlook for the coming year.
Investors and market watchers will be keeping an eye on agilon health's stock performance on the New York Stock Exchange as the company continues to navigate the operational challenges and financial forecasts outlined by Truist Securities.
InvestingPro Insights
The recent analysis by Truist Securities on agilon health Inc (NYSE:AGL) has provided investors with updated financial projections and a revised price target. To further enrich this perspective, insights from InvestingPro reveal additional factors that could influence investor decisions. According to real-time data, agilon health boasts a robust revenue growth of 74.48% over the last twelve months as of Q1 2024, demonstrating significant top-line expansion. Despite this, the company faces challenges with profitability, as indicated by a negative P/E ratio of -8.14 and an adjusted P/E ratio of -11.57 for the same period.
InvestingPro Tips highlight that the management's aggressive share buyback strategy and a balance sheet with more cash than debt might be seen as signs of strength. However, with analysts revising earnings downwards for the upcoming period and the company not expected to be profitable this year, investors should consider these factors in their valuation. It is worth noting that agilon health is trading at a low revenue valuation multiple, which could appeal to value-oriented investors.
For those seeking a deeper analysis, InvestingPro offers additional tips on agilon health, which can be accessed at https://www.investing.com/pro/AGL. Readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 10 more InvestingPro Tips available that could provide further guidance on whether agilon health aligns with your investment strategy.
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